Famble v. State Farm Ins. Co.

• Decision Date: 22 May 1992
• Docket Number: No. A92A0489,A92A0489
• Citation: 204 Ga.App. 332,419 S.E.2d 143
• Parties: FAMBLE et al. v. STATE FARM INSURANCE COMPANY.
• Court: Georgia Court of Appeals

Page 143

419 S.E.2d 143

204 Ga.App. 332

FAMBLE et al. v. STATE FARM INSURANCE COMPANY.

No. A92A0489.

Court of Appeals of Georgia.

May 22, 1992.

Sage Brown & Associates, Sage Brown, Savannah, for appellants.

Kent & Rackett, A. Martin Kent, William O. Williamson III, Herndon, Chestnut, Rosenblum & Ashby, Thomas R. Herndon, Simon & Booth, William M. Simon, Savannah, for appellee.

BIRDSONG, Presiding Judge.

Appellants Famble appeal the order of the superior court granting appellee State Farm Insurance Company's petition for declaratory judgment and entering summary judgment in favor of appellee.

Fernando Rodriguez owned a pickup truck; insurance coverage was provided pursuant to the terms of a policy issued in the state of Texas by State Farm. Rodriguez loaned the truck to George Garcia but instructed him that no one else was to drive it. Aureliano Ramirez drove the truck while it was on loan to Garcia and was involved in two automobile collisions, one of which apparently resulted in the death of Ursula Famble. Following the accident, State Farm obtained a reservation of rights from Rodriguez, regarding the issue whether Ramirez was a permissive user of the truck at the time of the incidents. Appellants Famble filed suit against Ramirez and Rodriguez in state court. State Farm filed a petition for declaratory judgment in superior court naming appellants Famble, Ramirez, Rodriguez, and one Gladys M. Lajes as party defendants. Appellants/defendants Famble filed an answer and defendant Rodriguez both answered and filed a counterclaim. State Farm supplemented its petition by filing as exhibits an affidavit of Rodriguez and a copy of the insurance policy. The superior court in its final order granted summary judgment to State Farm. In this order, the superior court concluded that "since there are no genuine issues of material fact regarding the permissive use issue, this court finds that State Farm does not have any coverage liability as provided for by terms in Paragraph A.8 on Page 5 of the policy." Held:

1. OCGA § 9-4-1 provides that the purpose of the statutory provisions pertaining to declaratory judgments (Title 9, Chapter 4, OCGA) is to settle and afford relief from uncertainty and insecurity with respect to rights, status, and other legal relations, and that these provisions are to be "liberally construed and administered." Thus in declaratory judgment actions, our courts are bound to consider the expressed purpose of our declaratory judgment statutes and to construe and administer these statutes liberally so as to accomplish this underlying statutory purpose.

2. Appellants assert the trial court erred by rendering an advisory opinion on a petition for declaratory judgment, by granting the petition for declaratory judgment when the rights of the parties have already accrued, and by granting a petition for declaratory judgment when appellee was not faced with any future undirected action that would jeopardize its rights.

" ' "Actions or opinions are denominated 'advisory' when there is an insufficient interest in the plaintiff or defendant to justify judicial determination, where the judgment sought would not constitute specific relief to a litigant or affect legal relations or where, by reason of inadequacy of parties defendant, the judgment could not be sufficiently conclusive." ' " Pilgrim v. First Nat. Bank, 235 Ga. 172, 174, 219 S.E.2d 135; accord Cook v. Sikes, 210 Ga. 722, 726, 82 S.E.2d 641. Applying this test, we find State Farm did not seek an advisory opinion by means of declaratory judgment. The declaratory judgment sought would provide specific relief to litigant State Farm and would directly affect legal relations between State Farm and defendants Ramirez and Rodriguez, within the meaning of Pilgrim, supra, and Cook, supra, and additionally, indirectly affect State Farm's legal relations with appellants/defendants Famble.

Appellants argue, inter alia, that State Farm has not been exposed to uncertainty with regard to its duty to defend its insured. The record discloses there exists a pending action which could possibly expose State Farm to uncertainty with regard to its duty to defend its insured, particularly in view of State Farm's timely reservation of rights (State Farm, etc., Ins. Co. v. Allstate Ins. Co., 132 Ga.App. 332, 208 S.E.2d 170), and also as to the scope of policy coverage (see Nationwide Mut. Ins. Co. v. Peek, 112 Ga.App. 260, 263, 145 S.E.2d 50; compare Shield Ins. Co. v. Hutchins, 149 Ga.App. 742(2), 256 S.E.2d 108). "An insurer can readily show that it is in a position of insecurity and uncertainty when faced with the dilemma of providing and paying for a defense of its insured in a tort action as required under the liability policy or of denying coverage and thus losing the opportunity to protect its interest in the tort case." (Emphasis supplied.) Jenkins & Miller, Ga.Auto.Ins.Law, § 7-4. Chastain v. U.S. Fid., etc., Co., 190 Ga.App. 215, 378 S.E.2d 397 is factually distinguishable.

" ' " 'The object of the declaratory judgment is to permit determination of a controversy before obligations are repudiated or rights are violated.... [I]ts purpose is to permit one who is walking in the dark to ascertain where he is and where he is going, to turn on the light before he steps rather than after he has stepped in a hole.' " ' " Chastain v. U.S. Fid., etc., Co., supra at 216-217(1), 378 S.E.2d 397. OCGA § 9-4-2 pertinently provides: "(a) In cases of actual controversy, the respective superior courts of this state shall have power, upon petition ... to declare rights and other legal relations of any interested party petitioning for such declaration, whether or not further relief is or could be prayed ... (b) In addition to the cases specified in subsection (a) ... the respective superior courts of this state shall have power, upon petition ... to declare rights and other legal relations of any interested party petitioning for the declaration, whether or not further relief is or could be prayed, in any civil case in which it appears to the court that the ends of justice require that the declaration should be made...."

"The inclusion of subsection (b) makes the Georgia Declaratory Judgment Act 'much broader in scope and more comprehensive in its jurisdiction of justiciable controversies' than the declaratory judgment acts of many other states. [Cit.] However, the presence in the declaratory judgment action of a party with an interest in the controversy adverse to that of the petitioner is necessary under either subsection (a) or (b). [Cits.] 'For a controversy to justify the making of a declaration, it must include a right claimed by one party and denied by the other, and not merely a question as to the abstract meaning or validity of a statute.' " (Emphasis supplied.) Pangle v. Gossett, 261 Ga. 307, 308, 404 S.E.2d 561. But, "[o]nly 'where no party to the proceeding has an interest in the controversy adverse to that of the petitioner' is there a complete absence of a justiciable controversy." Cawthon v. Waco Fire, etc., Ins. Co., 190 Ga.App. 797, 799(1), 380 S.E.2d 327.

In determining whether a party is present in the declaratory judgment action with an interest adverse to petitioner, as required by a liberal construction of OCGA § 9-4-2(b), a court may consider the totality of the circumstances reflected in the record before it, including the pleadings filed by the parties to the declaratory judgment action. State Farm entered a reservation of rights with its insured Rodriguez; clearly the insurer and the insured's interest are adverse regarding whether State Farm does or does not have a right to decline to defend the pending suit brought by appellants Famble against the insured and Ramirez. See State Farm, etc., Ins. Co. v. Allstate Ins. Co., supra (trial court properly denied motion to dismiss declaratory judgment on the ground of lack of justiciable issue where insurer was defending under a reservation of rights); but compare McCraney v. Fire, etc., Ins. Co., 182 Ga.App. 895, 896, 357 S.E.2d 327 (appellant failed to avail itself of "the proper and safe course of action" of entering upon a defense under a reservation of rights and then proceeding to seek a declaratory judgment). In fact, in his counterclaim Rodriguez avers "he is owed a defense, under the terms and provisions of the insurance agreement with State Farm." Additionally, we are not oblivious to the interest that appellants Famble have in this declaratory judgment action, which is obviously adverse to the interest State Farm has in establishing that appellant Ramirez was a person excluded as a "covered person" under the policy, in order to retain a source for satisfaction of any judgment which might be ultimately obtained against Ramirez in their pending civil suit. And, of course, defendant Ramirez would have an interest adverse to State Farm in regard to whether he is a "covered person"...